Thinking of hanging out a shingle and starting your own firm in 2019? Starting a new law firm is never an easy undertaking. There are so many things that you need to think about and plan for. And in the process of setting up a law firm, suddenly there is one more thing that you didn’t plan for. Just thinking about it is enough to make an indecisive would be new law firm practitioner change their mind. Don’t!! Starting your own firm may be the best business decision you ever make.
All law firms start with great ideas and good intentions yet not all new law firms succeed. Thomas Edison once said, “A good intention with a bad approach often leads to a poor result”. I can tell you that starting a law firm without a business plan is a plan for failure. Think of a business plan as a road map of where you want to go, and the route you are going to take to get there.
Right now you are probably thinking, how do I develop a business plan to start a law firm when I have never owned my own firm? If you are asking yourself that question, then you have just realized the importance of a business plan.
In its simplest terms a business plan will describe the goals that you want to accomplish and it will plan out the finances of achieving your goals.
So why do you want to start your own law firm? Here are some questions you can ask yourself that will help you decide if you are doing this for the right reasons:
· I am motivated to have my own law firm and I have good organizational and time management skills (or I am willing to hire someone who does)
· I am aware of my strengths and weaknesses and I have a vision of the future
· I have attainable personal and professional goals
· I have weighed the risks and benefits of starting my own practice and I am committed to being successful
Now that you have decided to take the leap of faith and start your own law firm, let’s go through the important items to address in your business plan:
1. Executive Summary. Although this is the first part of your business plan, it should be written last as it will summarize everything in your business plan.
2. Business Description a/k/a Elevator Pitch. This is a generalized but brief statement which generally includes the name of your firm, what areas you will specialize in and who your target client base is, at least initially.
3. Vision statement. The vision statement for your firm would be to attract and retain new clients through a marketing strategy designed to attracted clients in the firm’s area of specialty, to establish the firm’s presence in the legal community and establish a referral system within the legal community.
4. Mission Statement. To provide exceptional legal services to all clients so that they will be repeat clients or send referrals to the firm.
5. Initiatives/Objectives/Goals. Everyone wants to be successful. No one in their right mind would start a law firm without a goal to be successful. Like your marketing strategy, your business strategy will evolve. In this section you identify your long term goals – usually 5 years as well as your shorter term goals such as 3 years, 1 year and the next 6 months.
6. Client Development/Marketing Opportunities. Before developing this business plan, some market research would be helpful to determine what the local competition is within the community. If there is a particular target market such as an ethnic group (for example if you speak Spanish and want to target that market) you might consider preparing a client development strategy with that particular segment of the public. Look at the marketing that other firms are doing. Really think about the message that you want to convey to potential new clients and consider what your budget is to achieve your goals. It is important to plan a marketing strategy separate and apart from this business plan which should include your marketing budget and what potential marketing strategies you can take advantage of that will not cost anything out of the budget. Several forms of social media for example are available at no cost except time.
7. Competitive Advantages/Strengths. What will you offer your target market that will attract clients to your firm? Do you have some special experience in a particular area? If for example you want to do personal injury work and you have a medical license this might be an advantage over your competition.
8. Competitive Disadvantages/Weaknesses. You may be wondering why we are even addressing disadvantages and weaknesses. Starting a law firm requires a significant and emotional investment – for the rest of your career. You cannot go into this with blinders on because the reality is that you need to acknowledge your weaknesses not so they will stop you from opening your firm but so you can plan to overcome them. A disadvantage or weakness for all start-up firms is the already strong presence that other law firms have within the community. The firm that does personal injury work has been advertising for twenty years and they are well-known. But putting off your plans to start a law because of this will not change that. You can overcome weaknesses such as lack of presence in the community, less experience than other lawyers. Meet the challenges head on, eyes open. Acknowledge the weaknesses in your business plan and it will help you overcome them.
9. Opportunities. Identify the opportunities for success. Did you come from a larger well-known firm in which you were able to network with business people in the community? This is an opportunity.
10. Threats. Identify anything that would be a threat to the success of your firm, with the intention of planning to overcome it. Are you lacking in financial management skills? Is there a personal injury law firm down the block from your intended office location? You cannot stick your head in the sand about obstacles that are present. The plan here is not to acknowledge them and walk away from your goal of starting a firm. The intent is to identify threats or obstacles and plan to overcome them.
11. Business Objectives. In one or two sentences this reinforces the plan of how you are going to accomplish the goals in this business plan.
12. Industry Analysis. This does not have to be lengthy or comprehensive. You should conduct a market analysis to identify new opportunities.
13. Financial Projections. Every business is driven by money – income and expenses. While you cannot plan how many new clients will retain the firm in the first 6 months of business, you can project with some accuracy your business expenses such as rent, utilities, marketing, etc.
14. Action Plan. This is the part of your business plan where you itemize what you are going to do to accomplish the goals laid out in the business plan.
A business plan is an absolute necessity when planning a new business venture. Like your budget, it is a plan of where you are going and how you will get there. A business plan will:
· Define the purpose of your business
· Identify the operational needs to make the business a success
· Provide structure to your business ideas and help you plan their execution
You would never take a road trip to a destination that you have never been to before without a road map, think of this as taking a road trip to your new firm – you shouldn’t do that without a road map either!
Need help developing a strategic business plan? Call me at 813-340-9569 or email me at email@example.com. I will help you develop a strategic business plan, whether you are just starting out or, you already are a small firm practitioner and you need to find a new direction.
Check out my website at: www.fromlawyertolawfirm.com for more information.